Bitcoin (BTC) Price Analysis: Is That a Wedge Breakout?
Bitcoin was previously consolidating inside a rising wedge as bulls try to keep price afloat. However, bears might be winning out as price has already broken below the wedge support and is testing the next inflection point.
The 100 SMA dynamic support is holding for the time being as it remains above the longer-term 200 SMA. This signals that the path of least resistance is to the upside. In other words, the uptrend is still more likely to resume than to reverse. A move lower could still find dynamic support at the 200 SMA.
RSI is also in the oversold region to signal that sellers are tired and that buyers may take over. Stochastic has some room to slide so a few more losses could be seen. The wedge pattern spans $6,100 to around $6,800 so the resulting drop could be of the same height.
A bit of a double top could also be seen as price failed in its last two attempts to break past $6,800. The neckline at $6,600 has yet to be broken to confirm a selloff.
Cryptocurrencies had a pretty busy week, starting off with the approval of Square’s BitLicense, followed by the hack on Bithumb. The Bank of International Settlements released an article on why cryptocurrencies cannot eventually replace actual money in the global economy, citing issues in scalability and trust.
Meanwhile, persistent trade war fears are hurting risk sentiment and weighing on higher-yielding assets like bitcoin. The US Supreme Court also ruled in favor of e-commerce tax collection, which could mean lower activity and sales for online retailers, some of which use cryptocurrencies as payments.
Looking ahead, bitcoin would need a really strong positive catalyst to revive the uptrend and might simply consolidate or tumble further on the lack of developments.